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EPA proposes RFS volumes "reflective of market realities" for 2018

Alan Sherrard

Policy

July 6, 2017

On June 5 the US Environmental Protection Agency (EPA) released its draft renewable volume obligations (RVOs) for 2018 with maintained volume requirements at levels comparable to 2017 across all biofuel types under Renewable Fuel Standard (RFS) programme.

On July 5 the US EPA issued proposed volume requirements under the Renewable Fuel Standard (RFS) program for cellulosic biofuel, advanced biofuel, and total renewable fuel for the calendar year 2018. EPA also proposed biomass-based diesel volume standards for the calendar year 2019. The proposed volume requirements are listed in the table above (courtesy EPA).

The Renewable Fuel Standard (RFS) – a bipartisan policy passed in 2005 and signed into law by President George W. Bush – requires increasing volumes of renewable transportation fuels in the US fuel stream. According to US Environmental Protection Agency (EPA), the proposed volume requirements and associated percentage standards for 2018 maintain renewable fuel volumes at levels comparable to the 2017 standards, recognising “limits to the growth of cellulosic and advanced biofuels”.

Increased fuel security is an important component of the path toward American energy dominance. We are proposing new volumes consistent with market realities focused on actual production and consumer demand while being cognizant of the challenges that exist in bringing advanced biofuels into the marketplace. Timely implementation provides certainty to American refiners, the agriculture community and broader fuels industry, all of which play an important role in the RFS program, said EPA Administrator Scott Pruitt in a statement.

The agency has proposed a total renewable fuel volume of 19.24 billion gallons, of which 4.24 billion gallons is advanced biofuel, including 238 million gallons of cellulosic biofuel. The 15 billion gallon balance is for conventional renewable fuels like corn ethanol.

We are pleased EPA is proposing to maintain the conventional biofuel requirement at the 15 billion gallon level required by the statute, just as EPA finalised in its 2017 RVO. Consumers only see the full benefits of the RFS when EPA implements the policy as intended by Congress. By maintaining the 15 billion gallon level for corn ethanol, the rule will also help to drive more investment in infrastructure to accommodate higher ethanol blends. The RFS is a vital policy and we encourage EPA to finalize this rule as quickly as possible and certainly in time to meet the statutory deadline of November 30, said Bob Dinneen, President and CEO of Renewable Fuels Association (RFA), a US national trade association for the ethanol industry.

For biodiesel, which together with renewable hydrocarbon diesel such as hydrogenated vegetable oils (HVO) fall under the “biomass-based” diesel category of the RFS, a subset of the overall advanced biofuels category the EPA proposal would maintain the minimum required biomass-based diesel volumes at 2.1 billion gallons for 2019. The EPA also proposed to set the 2018 RFS for advanced biofuels based on a minimum applicable volume of 4.24 billion gallons, a decrease from 4.28 billion gallons for 2017.

This proposal continues to underestimate the ability of the biomass-based diesel industry to meet the volumes of the RFS program. This is a missed opportunity for biodiesel, which reduces costs, provides economic benefits and results in lower prices at the pump. Higher advanced biofuel and biomass-based diesel volumes will support additional jobs and investment in both rural economies and clean-energy-conscious communities, said Anne Steckel, Vice President of Federal Affairs at the National Biodiesel Board (NBB).

NBB believes EPA should set the advanced biofuel requirements for 2018 based on a volume of at least 5.25 billion gallons and the biomass-based diesel volume for 2019 at 2.75 billion gallons.